Bombay High Court
Ozone Associates Thr. Proprietor, ... vs State Of Maha., Dept. Of Medical ... on 27 September, 2024
Author: Vinay Joshi
Bench: Vinay Joshi, M.S. Jawalkar
2024:BHC-NAG:10908-DB
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY,
NAGPUR BENCH, NAGPUR.
WRIT PETITION NO. 7775/2023
1. Ozone Associates through its
Proprietor Shri Santosh Nanaji
Kuchankar, aged 45 yrs., Occ. Business,
at Civil Lines, near Inspire Coaching Classes,
Chandrapur, Tah. & Dist. Chandrapur.
2. Sai Marketing, through its Proprietor
Sau. Nilima Suresh Bandiwar through
power of attorney Suresh Sitaram Bandiwar,
aged 52 yrs., Occ. Business, at Thakkar
Colony, Road, Vakrakund Chowk, Naginabag,
Chandrapur through Power of Attorney.
.... Petitioners
VERSUS
1. State of Maharashtra,
Department of Medical Education
and Drugs through its Secretary,
Government of Maharashtra,
Mantralaya, Mumbai.
2. Commissioner,
Medical Education and Research,
Maharashtra, 4th Floor, Govt. Dental
Hospital Building, Saint George Hospital
Compound, Mumbai-1.
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3. State of Maharashtra, through its Dean,
Chandrapur Government Medical
College and Hospital, TB Hospital,
Ramnagr, Chandrapur.
4. M/s. Energygov Manpower Agency
India Pvt. Ltd. through Authorized
officer, Shop No.1, Ground Floor,
Shreeji Krupa, Ram Mandir Road,
near Bank of Baroda, Bhayander
West, Thane-401101.
....RESPONDENTS
-------------------------------------------------------------------------------------
Mr. A.S. Mardikar, Sr. Advocate with Mr. Anil Dhawas, Advocate for
petitioners.
Mr. D.V. Chavhan, Government Pleader for respondent Nos. 1 to 3.
Mr. P.A. Abhyankar, Advocate for respondent No.4.
-------------------------------------------------------------------------------------
CORAM : VINAY JOSHI AND
SMT.M.S. JAWALKAR, JJ.
DATE : 27.09.2024
ORAL JUDGMENT : (PER VINAY JOSHI, J.)
Rule. Rule made made returnable forthwith. Heard finally
learned counsel appearing for the parties with the consent.
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2. This petition is under Article 226 of the Constitution of
India seeking to set aside the Work Contract, assigned to respondent
no. 4 and to set aside the Communication dated 14.03.2024 whereby
the earlier Tender Process was cancelled.
3. The fats in brief are that both petitioners are proprietory
concern providing services of supplying man power/human resources.
Respondent no. 3 is a Government Medical College and Hospital run
by the State Government. It is the Government Body controlled by
the Department of Medical Education and Drugs. Respondent nos. 1
and 2 are having administrative and financial control over respondent
no.3 College. Respondent no.4 is a private agency doing business of
supplying services like the petitioner.
4. The State Government has decided to establish
Government Medical College and hospital at Chandrapur.
Government has taken a Policy decision to outsource the employees
as regards to respondent no.3 College and Hospital. The Government
took a decision vide Government Resolution (GR) dated 09.01.2017
to establish 500 beded Hospital by creating 571 supernumerary post
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and availing their services by outsourcing. Accordingly, respondent
no. 3, Medical College has floated a public tender inviting bids for
providing outsourcing services. Both petitioners had participated in
the tender process and declared to be successful bidders. Work orders
have been issued to both petitioners for separate posts and till date
they are providing services in terms of various work orders. Time to
time extention were given to the petitioners. In pursuance of last
extensions dated 31.03.2023, the petitioners are providing services to
the establishment of respondent no.3 Medical College by engaging
Group "C" and "D" employees.
5. On 16.09.2022, respondent no.3 College has issued fresh
tenders for providing man power services. In pursuane of said tender
notices, the petitioners had participated in the tender process. Both
petitioners were qualified in providing services and they were selected
as lowest bidders. Respondent no. 3 Medical College has forwarded a
proposal dated 19.11.2022 to respondent no.2 for final sanction and
issuance of work order for 36 months to the petitioners.
6. It is the petitioner's case that on 06.12.2022 the State
Government has passed a Resolution providing guidelines and
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certain procedure to be followed while availing man power by
outsourcing services of Group "C" and "D" employees. In pursuance
of said GR dated 06.12.2022, fresh tenders have been issued for
providing services to the Government Hospital and Medical Colleges
all over the State of Maharashtra. By floating tender process, nine
agencies have been empowered for allocating man power services to
the Government Hospitals in the State of Maharashtra vide GR dated
14.03.2023. There was no clearity about charges/reminders, hence by
issuing another GR dated 06.09.2023, clarification was issued. It was
followed by GR dated 27.09.2023 selecting one agency i.e. Sainik
Intelligence Security Private Company for providing man power to
Group C and D services by outsourcing to 27 Government Medical
Colleges in the State of Maharashtra.
7. It is the petitioner's contention that tender process was
already completed in pursuance of tender floated on 16.09.2022. The
petitioners were selected as "L1" bidders and already proposal for
approval was forwarded on 19.11.2022. In the wake of such position
another GR dated 31.10.2023 has been issued by which earlier GR
dated 06.09.2023 was recalled. In effect, services of all the panel
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agencies came to be cancelled and it is direted that if their services are
availed in terms of GR dated 06.09.2023 they should be continued
for 9 months only with effect from 21.10.2023.
8. It is contended that in the midway work order was issued to
respondent no. 4 by respondent no.2 on 13.10.2023 though the GR
dated 27.09.2023 enlisting impaneled agencies does not reflect the
name of respondent no. 4. According to the petitioners, in view of
GR dated 31.10.2023 the impanelment of 9 agencies has been
cancelled. Moreover, the respondent no. 4 was not an impanelled
agency, therefore allotment of work to the respondent no. 4 is illegal
and arbitrary. It is contended that till date no agreement was executed
in favour of respondent no. 4 but the petitioners have continued in
providing the services.
9. It is the petitioner's contention that respondent did not
communicate to the petitioners about lapsing of tender process
initiated vide tender notice dated 16.09.2022. The petitioners were
already selected and proposal was pending for administrative sanction.
However without giving an opportunity, vide impugned
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communication date 14.03.2024 the tender process was abandoned,
which is arbitrary illegal and unsustainable in law. In such a
background, the petitioner seeks for cancellation of work order dated
13.10.2023 issued in favour of respondent no. 4, and declaration that
abandonment of tender process vide communication dated
14.03.2024 is illegal, arbitrary and unsustainable.
10. The respondent No.3, Dean Government Medical College
and Hospital, Chandrapur put the resistance to the petition vide
reply-affidavit dated 29.01.2024. It is contended that though Work
work was assigned to the petitioners and time to time extensions
have been granted, the last extension was with a rider that it shall
remain uptill the consolidated process for filling up the
Supernumerary posts would be completed. It is submitted that in
earlier tender process though the petitioners have emerged as lowest
bidders, it does not give an absolute right to award the contract, i.e.,
tenderer has no legal right or prerogative to seek contract. The
respondents would submit that in terms of subsequent policy
decision taken by the Government, they have revoked the earlier
tender process which does not give any right to the petitioners.
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11. The Labour Department of Government of Maharashtra
has issued a Request for Proposal ("RFP") and through open
competitive bidding process, invited proposal from organizations.
Respondent No.4 which is a Special Purpose Vehicle a consortium of
M/s. Sainik Intelligence Security Pvt. Ltd. and M/Sutiksha India
Security Pvt. Ltd. turned to be successful bidder in the said process.
Both tenderer are consortium members of the empanelled agency. In
turn, agreement dated 30.08.2023 was executed in between the
Labour Department and empanelled agency. It was followed by
issuance of work order to respondent No.4 dated 13.10.2023 i.e.
before filing of the present petition.
12. It is respondents' stand that State Level Tender Process was
undertaken by the Labour Department of the Government of
Maharashtra as a part of Policy decision. Accordingly, Tender
Process was initiated on 02.09.2021 for entire Maharashtra which
resulted into allotment of work to respondent No.4. It is policy
decision of the State Government and in accordance with the
decision, several Government Medical Colleges and Hospitals across
the State have already entered into agreement with the respondent
No.4 as directed by the respondent No.2. It is contended that
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petitioners have not challenged the Tender Process by which
empanelment of nine agencies have been made as per policy
decision.
13. According to the respondents, though GR dated
31.10.2023 terminates the earlier GR dated 06.09.2023, it is
clarified that services availed in terms of earlier GR would be
continued for nine months. It is emphasized that the petitioners
have not challenged the GR dated 27.09.2023, by which agencies
have been empaneled. Moreover, without challenging the process
initiated vide RFP dated 02.09.2021, the petitioners cannot raise
further challenges. Moreover, the petitioners have not participated
in the RFP dated 02.09.2021 since they were technically
disqualified. It is clarified that the Work Order was issued to
respondent No.4 being successful bidder as a part of Tender Process
conducted by adopting uniform process.
14. Respondent No.4 also resisted the petition by justifying
allotment made by the respondent No.3 in his favour. It is
contended that the Government has taken a policy decision of
appointing employees by outsourcing through human resource
providers. In pursuance of GR dated 18.06.2014, policy of
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outsourcing was adopted. The petitioners were initially appointed
through various contracts and time to time extension was accorded
till finalising uniform Tender Process. Though in earlier Tender
Process undertaken by respondent No.3 Medical College, the
petitioners were found "L1" and proposal was forwarded, however,
in the meantime, due to change of policy vide GR dated 14.03.2023,
nine agencies have been empanelled. The said panel includes an
agency namely M/s. Sainik Intelligence Security Pvt. Ltd of which
respondent No.4 is consortium member. It is contended that the
empanelled agency has submitted the name of its Special Purpose
Vehicle i.e. respondent No.4, on which agreement was executed
between respondent No.4 and the Commissioner of Labour on
30.08.2023. According to respondent No.4 though vide GR dated
31.10.2023, Labour Department has cancelled the earlier GR dated
06.09.2023, however it was with a rider to continue services of the
empanelled agencies appointed prior to 21.10.2023 and therefore,
the services shall be continued till 20.07.2024.
15. It is contended that the action taken by respondent Nos. 1
and 2 is in pursuence with various GR, the Labour Department has
undertaken a legitimate procedure for empanelment of human
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resource. The petitioners cannot claim right merely on account of
participating in the District Level Tender Process initiated on
16.09.2022. By change in policy, State Level empanelment was
made and vide GR dated 14.03.2023, the State Government made it
compulsory for all Departments. In turn, the earlier Tender Process
initiated on 16.09.2022 was scrapped.
16. The principal challenge is to the Work Order dated
13.10.2023 issued by respondent No.2 in favour of respondent No.4
and consequent communication dated 08.11.2023. The petitioners
also sought declaration that action of respondent inducting
respondent No.4 for providing services to respondent No. 3 is illegal,
arbitrary and against GR dated 31.10.2023. By way of amendment,
the petitioners raised additional challenge to the communication
dated 14.03.2024, whereby the earlier Tender Process was
cancelled.
17. Undoubtedly, the Government has taken a policy decision
of appointing employees in Group "C" and "D" by way of
outsourcing through human resource providers. Respondent No.3
Medical College was established by creating imaginary post of Class
"III" and "IV" cadre vide GR dated 09.01.2017, which also permits
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availing private services by outsourcing. Different Work Orders have
been issued to both petitioners on 26.04.2021 for allotment of work
by way of outsourcing. Time to time, the period was extended and
the last extension was dated 31.03.2023 with a rider till
implementing consolidated Tender Process for availing outsourcing
services. It is not in dispute that respondent No.3 has initiated the
District Level Tender Process and on opening technical bids, the
petitioners were found eligible. The fresh Tender Process was
initiated on 21.09.2022 availing outsourcing services for the period
of three years. The petitioners relied on the communication dated
20.10.2022 to show that the petitioners have been qualified and
accordingly on 19.11.2022, a proposal was forwarded to the State
for sanction. The petitioners emphasized that though proposal was
forwarded long back, decision was not taken with ulterior motive.
During pendency, vide impugned communication dated 14.03.2024,
the petitioners were informed that the said Tender Process was
abandoned for lapse of period of one year. According to the
petitioners, the said termination of Tender Process was arbitrary,
malafide and without hearing the petitioners and thus, needs to be
quashed.
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18. In the meantime, the Government vide GR dated
06.12.2022 took a decision to follow certain procedure for availing
the services of manpower of Group "C" and "D" employees. In
pursuance of policy decision, on 06.12.2022 fresh tenders were
issued for availing private services to the Government Hospital and
Medical Colleges throughout the State of Maharashtra. It was
followed by issuing GR dated 14.03.2023 by the Ministry of
Industries, Energy and Labour, Government of Maharashtra selecting
nine agencies to be empanelled for allocating manpower services
throughout the State. It is petitioners' contention that vide
subsequent resolution dated 31.10.2023, the earlier resolution dated
06.09.2023 has been recalled and thus, the decision taken by the
Government for allocating work to the respondent No.4 vide GR
dated 27.09.2023 is arbitrary and illegal.
19. We have examined the GR dated 31.10.2023 which was
issued in suppression of earlier GR dated 06.09.2023, whereby it has
been clarified that the agencies which were appointed vide GR dated
06.09.2023 shall be continued for the period of nine months from
21.10.2023. It is the respondents' stand that though in earlier
Tender Process, the petitioners were selected as "L1", however due
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to change in Government Policy of making the empanelment on
State Level, the earlier Tender Process was abandoned. Though vide
impugned order dated 14.03.2024, the reason for abandonment was
of lapsing of period of one year, however it is argued by the
respondents that besides that, it is a policy decision of Government
to maintain uniformity throughout the State, empanelment was
made. The respondents also attracted our attention to earlier tender
document which specifies that 120 days period was fixed for
completing the process and thus, for want of following time-line, it
was cancelled.
20. It is evident that vide GR dated 06.12.2022, guidelines
have been issued for providing services to all the Government
Hospitals and Medical Colleges in the State of Maharashtra by
making empanelment. In order to have uniformity, nine agencies
have been appointed though tender process at State Level. In so far
the contention regarding malafides is concerned, besides bald
averment, there are no pleadings not even a suggestion as to how
the decision to change the policy and cancel the earlier Tender
Process was actuated with malafides. Entire emphasis was that since
there was a concluded contract between the parties, the cancellation
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of contract amounts arbitrariness. In-fact, the proposal forwarded
for approval was not finalized and thus, there was no concluded
contract. For the sake of argument, eve if it is assumed that there
was a concluded contract, mere termination of process cannot be
construed as arbitrary. A contract, if terminated may follow certain
consequences. However, on the touchstone of parameters of
administrative action to hold it arbitrary when such decision is
found to be bonafide and not actuated with arbitrariness, such
contention about malafides cannot be entertained.
21. Notably, by Public Tender Process, State Level
empanelment was made, the petitioners did not participate nor the
said process has been challenged. The petitioners were declared as
"L1" in the District Level Process adopted by respondent No.3
though inconsistently with State policy, however that would not give
any right to the petitioners unless it is actuated with malafides. The
State has taken a policy decision for appointing panel agency for
entire State. The Government is guardian of State finance and
expected to protect financial interest. Such decisions are not
amenable to judicial review unless they are actuated with
arbitrariness or favouritism. Basically, the right to chose of the
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Government cannot be considered as arbitrary so long as it is
complying with the principles of fairness and equality. By way of
Tender Process, empanelment was made and respondent No.4 is
consortium member of the empanelled agency.
22. Though extensions were given to the petitioners, however
it was limited to the extent of till completion of consolidated Tender
Process. By way of change of policy empanelment was made to
adopt uniform process. Selection of respondent No.4 through
consortium agency by Tender Process was not challenged. The State
has complete freedom to adopt the policy in the interest of the State.
Writ Courts are not justified in interfering with the policy decision
taken by the State. As stated above, the petitioners have no inherent
right to get allocation through Tender Process which was cancelled.
The petitioners have not established that the action of cancellation
was malafide. Though the petitioners have placed on record an
order passed by the Co-ordinate Bench in Writ No. 10646/2023
(Krupa Services Private Ltd. and others Vs. Labour of Commissioner
and others) along with others dated 10.11.2023 that would not
assist as on the basis of the statement made by the Government
Pleader, the matter was disposed of.
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23. The learned Government Pleader placed reliance on the
decisions of the Supreme Court in cases of N.G. Project Limited Vs.
Vinod Kumar Jain and others, (2022) 6 SCC 127 and State of
Jharkhand and others Vs. CWE-SOMA Consortium, (2016) 14 SCC
172 to impress about the general principles regarding the limitation
on the powers of judicial review in administrative action. The law is
fairly well settled in that regard that the judicial review of
administrative action is only with an intent to prevent arbitrariness,
irregularity, unreasonableness, bias and malafides. The objective is
not to make the Court an Appellate Authority for scrutinizing the
Tender Process or a policy decision taken by the State. In the light
of said parameters, we have examined the material.
24. In conclusion, the petitioners have failed to establish
inherent right to seek allocation on the basis of Tender Process
which was abandoned due to change in policy decision. The
allocation to respondent No.4 Agency is for a specific period through
a Tender Process which is not under challenge. Already an
agreement has been executed with respondent No.4 Agency for
specific period. In absence of malafides, arbitrariness, the said
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allocation cannot be questioned. In substance, we see no merit in
the petition, hence dismissed.
Later on:-
At this stage, after pronouncement of the order, the
petitioner seeks for continue the interim order dated 14.02.2024 to
approach the Higher Forum. By way of interim order, the
petitioners' termination order dated 08.02.2024 has been stayed.
Already the petitioners temporary appointment was terminated but
petitioners enjoyed the benefits till date. In the circumstances we
are not inclined to extend the interim order.
(SMT.M.S. JAWALKAR, J.) (VINAY JOSHI, J.)
Gohane
Signed by: Mr. J. B. Gohane
Designation: PA To Honourable Judge
Date: 01/10/2024 11:13:05
